The Commonwealth Bank has today revealed an action plan to improve outcomes for wealth management customers, including rebating grandfathered commissions for Commonwealth Financial Planning customers.
CBA wealth management chief operating officer Michael Venter said the changes were in part a response to issues identified during the Hayne royal commission.
“The changes announced today continue the process of reform underway in our wealth management businesses and form part of our response to specific issues identified this year through the royal commission,” he said.
The initiatives for improving outcomes for customers include rebating all grandfathered commissions to Commonwealth Financial Planning customers from January 2019.
This rebate will benefit around 50,000 customer accounts by approximately $20 million annually.
“We support the removal of grandfathered commission from superannuation and investment products across the wider industry and believe a legislative approach should be considered,” said Mr Venter.
The bank has also announced plans to review any advice fees charged to deceased estates across all its advice licensees and refunding with interest any instances where unauthorised fees have been charged.
“Charging unauthorised advice fees to deceased estates is unacceptable. A broader review of deceased estates is underway across our advice licensees. It will go back seven years to ensure that any instances where unauthorised fees have been charged are identified and refunded with interest,” said Mr Venter.
Customers will save approximately $25 million annually with the bank's plan to remove certain fees on legacy wealth products and all CFP customers will have an option to renew their ongoing service arrangements every two years.
The new initiatives are the latest changes the bank has made after spending $580 million over the past six years to improve its advice business.
Commonwealth Bank has also spent approximately $270 million in compensation to customers who were provided with poor quality advice or charged fees for no service.
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